April 19, 2014

Voters facing tax hike

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By Tom Gresham
Observer staff

Town voters will decide next week whether to approve municipal and school budgets that would raise the combined residential property tax rate by 14 cents in the 2005-06 fiscal year.

Williston residential property owners would pay an estimated property tax rate of $1.73 if each budget were passed. The tax rate increase would cost the owner of a $200,000 home an additional $280.

The tax rate is an estimate and often shifts a few cents between Town Meeting Day and July, when the Selectboard officially sets the rate.

The sharp rate increase comes a year after Act 68, a new education funding law that replaced the controversial Act 60, helped slash the residential property tax rate in Williston by 26 cents. At the time, local officials said the decrease would be a one-time event and warned that the tax rate would begin to climb again this year, though hopefully at a slower pace than it did under Act 60.

The projected tax rate is still 12 cents below Williston’s tax rate during the final year of Act 60. The proposed increase amounts to an 8.1 percent hike in the tax rate over last year. By comparison, the rate increase between the 2001-02 and 2002-03 fiscal years, when Act 60 still reigned, was 10.3 percent.

Sen. Ginny Lyons, D-Chittenden County, and Rep. Mary Peterson, D–Williston, each said this week that various ideas to alter Act 68 and further reduce the reliance on the property tax continue to float around the state Legislature. However, Lyons said, there is an inclination to see how Act 68 works for a few years before making any more major changes.

The increases in the respective operating budgets for Champlain Valley Union High School, the Williston School District and the town of Williston ranged from modest to above average, but the costs of the bonds for two large construction projects fattened the capital budgets.

In particular, Williston’s share of the $19 million renovation project at CVU contributed about 3 cents to the increase in the tax rate, and debt service on Williston’s $6.3 million public safety facilities bond, which was approved by voters in November, added about another 2 cents.

Overall, the education property tax rate increased 10 cents from 2004-05 to $1.61. According to the Williston School District, 5 cents of the education rate increase can be directly attributed to a 3 percent decrease in the town’s common level of appraisal.

The CLA measures the percentage of the actual fair market value of property, based on sales, that is reflected in a municipality’s grand list. As the CLA falls, the state factors that into its funding formula. The end result is a property tax rate increase that corresponds to the rise in property values.

Driven by the construction project, CVU’s proposed budget represents an 11 percent increase over a year ago, while the proposed Williston School District budget marks a 6 percent increase.

The major addition to the local school district’s budget is $65,000 for the hiring of a full-time enrichment teacher at Allen Brook School. A part-time enrichment teacher was removed from the staff at Allen Brook two years ago as part of cuts after voters rejected two proposed budgets.

On the municipal side, the proposed budget marks a 15.5 percent increase over the current budget — more than double the increase in the budget a year ago.

Town Manager Rick McGuire pointed out the municipal tax rate of 12 cents remains one of the lowest in the state, largely because of revenue from the town’s local sales and rooms and meals taxes. Without that revenue — roughly $2.7 million annually — the estimated municipal tax rate would be 39 cents, McGuire said.

In addition to the debt costs of the public safety facility construction, the Selectboard voted to contribute $147,300 to help continue bus service in Williston, adding more than a penny to the tax rate.

Williston’s non-residential property tax rate would be $1.70 under the proposed budgets, meaning, unlike last year, residential property owners would pay a higher tax rate than non-residential owners during the upcoming fiscal year. Last year’s non-residential property tax rate in Williston was $1.64.

The non-residential tax is not tied to local school spending, though it is tied to the CLA. Residential and non-residential properties share the same municipal rate.

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